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Page 1: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Capturing Opportunities & Winning Business

with Saudi Aramco and its Suppliers©2017, Saudi Aramco

Page 2: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Key Points

• Immediate Opportunities for Materials

• Materials with no or few local suppliers

• Increasing capability – removing limitations

• Collaboration - Saudi Aramco and its supply chain will drive new business

• Doing Business - be competitive

• Over SAR 1 trillion in spend over the next 10 years will create opportunity

iktva is imperative for doing business with

Saudi Aramco

Competitive Cost

Quality

Schedule

Environment

Safety

Page 3: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Saudi Aramco 10-Year Demand Forecast

How to Win Business

IK Participation Limitations

Immediate Opportunities

Agenda

1

2

3

4

Page 4: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Saudi Aramco Suppliers Classification

Suppliers

Classification

Manufacturer

o An entity that owns and produces materials

Service Provider (Contractor)

o An entity that provides any type of service

(engineering, landscaping, construction, training ..)

Agent

o A representative of an entity (or more) that owns

and produces materials

Page 5: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

SR 22.5 B Historical Spend Sample

Global Historical Spend Distribution

Mat. Spend with

OOK MFR Only

29%

Mat. Spend with

IK MFR Only

2%

Mat. Spend with

1-2 IK MFR

23%

Mat. Spend With

3+ IK MFR (OOK

spend)

32%

Mat. Spend With

3+ IK MFR (IK

spend)

14%

Note: Sample of historical spend: Average of 6 years

Areas of Immediate Opportunity:

Materials sourced OOK only

Materials with 1-2 IK MFRs

For further development:

Materials with 3+ IK MFRs but

limited in capacity and capability

Page 6: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Material Spend with No Local Manufacturers

Global Historical Spend Distribution

Areas of Immediate Opportunity:

Materials sourced OOK only

Mat. Spend with

OOK MFR Only

29%

Mat. Spend with

IK MFR Only

2%

Mat. Spend with

1-2 IK MFR

23%

Mat. Spend With

3+ IK MFR (OOK

spend)

32%

Mat. Spend With

3+ IK MFR (IK

spend)

14%

Note: Sample of historical Spend: Average of 6 years

Page 7: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

SR 7 MM

SR 16 MM

SR 44 MM

SR 59 MM

SR 84 MM

SR 90 MM

SR 98 MM

SR 135 MM

SR 159 MM

SR 227 MM

SR 239 MM

SR 434 MM

SR 455 MM

SR 872 MM

SR 1,212 MM

SR 2,006 MM

Air Conditioning

Office Supplies

Safety & Security

Community

Gen Sup & Bldg.

Environmental

Communication

Industrial Services

Computers

Medical

Static

E&I

Rotating

Piping Sys.

Chemicals

Drilling

Materials Currently Sourced OOK Only –Drilling Equipment

Downhole Equipment

LINER HANGERS SR 364 MM

PACKERS SR 347 MM

INSTALLATION SERVICES SR 181 MM

VALVE: SUB-SURFACE SAFETY SR 80 MM

ISOLATION VALVES & ACCESSORIES SR 75 MM

NIPPLE: LANDING SR 33 MM

LATERALS & ACCESSORIES EQUIPMENT SR 19 MM

Downhole Equipment

55%

Csg Acc & Cement Eqp

11%

Adv Well Comp Eqpt

29%

Advanced Well Completion

EQUALIZER/ SCREENS ACCESS SR 270 MM

SMART, ACCESSORIES SR 140 MM

GAUGES SR 53 MM

EXPANDABLE, CASING & ACCESSORIES SR 41 MM

DOWNHOLE WET CONNECT SYSTEM SR 26 MM

CABLE, MONITORING SYSTEM, SR 24 MM

PDHMS, ACCESSORIES SR 13 MM

COUPLING PROTECTOR SR 8 MM

EXPANDABLE, SCREEN SR 7 MM

Note: Sample of historical spend: Average of 6 years

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Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

SR 7 MM

SR 16 MM

SR 44 MM

SR 59 MM

SR 84 MM

SR 90 MM

SR 98 MM

SR 135 MM

SR 159 MM

SR 227 MM

SR 239 MM

SR 434 MM

SR 455 MM

SR 872 MM

SR 1,212 MM

SR 2,006 MM

Air Conditioning

Office Supplies

Safety & Security

Community

Gen Sup & Bldg.

Environmental

Communication

Industrial Services

Computers

Medical

Static

E&I

Rotating

Piping Sys.

Chemicals

Drilling

Materials Currently Sourced OOK Only –Chemicals

Drllg Fluids-Mud29%

Drllg Chem-General 62%

Well Stimulant Agents 6%

General Drilling Chem.SALTS SR 426 MM

LUBRICANTS SR 111 MM

H2S SCAVENGER SR 98 MM

SHALE/BOREHOLE STABILIZER SR 50 MM

SPOTTING FLUID SR 22 MM

THINNER SR 16 MM

EMULSIFIERS & SURFACTANTS SR 9 MM

OXYGEN SCAVENGER SR 8 MM

DEFOAMER SR 6 MM

Page 9: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

SR 7 MM

SR 16 MM

SR 44 MM

SR 59 MM

SR 84 MM

SR 90 MM

SR 98 MM

SR 135 MM

SR 159 MM

SR 227 MM

SR 239 MM

SR 434 MM

SR 455 MM

SR 872 MM

SR 1,212 MM

SR 2,006 MM

Air Conditioning

Office Supplies

Safety & Security

Community

Gen Sup & Bldg.

Environmental

Communication

Industrial Services

Computers

Medical

Static

E&I

Rotating

Piping Sys.

Chemicals

Drilling

Materials Currently Sourced OOK Only –Piping System

Valve-Ball15%

Valve-Butterfly

7%

Valve-Plug7%

Pipe, Metal16% Pipe

Fittings, CS13%

Pipe Fitting, CSCAP; PIPE; BW; ALLOY STEEL SR 23 MM

CAP; PIPE; CARBON STEEL; SR 23 MM

CAP; PIPE; SW OR THREADED, SR 14 MM

SPOOL: CLAD PIPE SPOOL SR 31 MM

TEE; PIPE, SPLIT TEE; HOT TAP SR 7 MM

TEE; PIPE; BW; CARBON STEEL SR 17 MM

Valve ButterflyVALVE; BUTTERFLY; HIGH PERFORMANCE

SR 42 MM

VALVE; BUTTERFLY; NPS 14 AND UP SR 9 MM

Page 10: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

Materials Currently Sourced OOK Only –Rotating Equipment

CompressorsCOMPRESSOR; AIR; CENTRIFUGAL

SR 34 MM

COMPRESSOR; DRY-SCREW SR 7 MM

COMPRESSOR; RECIPROCATING

SR 29 MM

Pumps

PUMP; CENTRIFUGAL SR 11 MM

PUMP; RECIPROCATING SR 6 MM

PUMP; VACUUM; API 681 SR 7 MM

Spares, Gas Turbines

19%

PumpCentrifug.

6%

Comprsr. Recip.7%

Comprsr, Centrifug.

52%

Comprsr. Utility Air

11%

SR 7 MM

SR 16 MM

SR 44 MM

SR 59 MM

SR 84 MM

SR 90 MM

SR 98 MM

SR 135 MM

SR 159 MM

SR 227 MM

SR 239 MM

SR 434 MM

SR 455 MM

SR 872 MM

SR 1,212 MM

SR 2,006 MM

Air Conditioning

Office Supplies

Safety & Security

Community

Gen Sup & Bldg.

Environmental

Communication

Industrial Services

Computers

Medical

Static

E&I

Rotating

Piping Sys.

Chemicals

Drilling

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Saudi Aramco: Public

SR 7 MM

SR 16 MM

SR 44 MM

SR 59 MM

SR 84 MM

SR 90 MM

SR 98 MM

SR 135 MM

SR 159 MM

SR 227 MM

SR 239 MM

SR 434 MM

SR 455 MM

SR 872 MM

SR 1,212 MM

SR 2,006 MM

Air Conditioning

Office Supplies

Safety & Security

Community

Gen Sup & Bldg.

Environmental

Communication

Industrial Services

Computers

Medical

Static

E&I

Rotating

Piping Sys.

Chemicals

Drilling

Note: Sample of historical spend: Average of 6 years

Materials Currently Sourced OOK Only –Electrical & Instrumentation

Cable, PowerSUBMARINE,69 KV-230 KV SR 65 MM

Valves Relief

DISC; RUPTURE ASSEMBLY SR 59 MM

SwitchgearBUS; ISOLATED PHASE BUS DUCT

SR 10 MM

SWITCHGEAR:SF6, 2 KV, SR 6 MM

SWITCHGEAR:SF6, 115KV SR 41 MM

Cable, Power

20%

Valves Relief 14%

Switchgear13%

Control Devices

5%

Flow Instrumentation

7%

UPS 8%

Control Panel, ESD

4%

Electrical Motors

4%

Switchgear, HV6%

Page 12: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Material Spend with 1-2 Local Manufacturers

Global Historical Spend Distribution

Mat. Spend with

OOK MFR Only

29%

Mat. Spend with

IK MFR Only

2%

Mat. Spend with

1-2 IK MFR

23%

Mat. Spend With

3+ IK MFR (OOK

spend)

32%

Mat. Spend With

3+ IK MFR (IK

spend)

14%

Note: Sample of historical spend: Average of 6 years

Areas of Immediate Opportunity:

Materials with 1-2 IK MFRs

Page 13: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

Office Supplies

Air Conditioning

Industrial Services

Gen Sup & Bldg. Mat.

Computers

Static

Safety & Security Equip

Rotating

Environmental

E&I

Chemicals

Piping Sys.

Drilling

FloatEquipment

3%

TubingOCTG

3%

Whipstock3%

Valves3%

Bonnet3%

Centralizer4%

Spool Assy.10%

Tree13%

Casing OCTG49%

SR 2,317 MM

1-2 Local Manufacturer Historical Spend –Drilling Equipment

Page 14: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

1-2 Local Manufacturer Historical Spend –Piping System

Pipe 47%

Valve: Ball 16%

Valve: Gate 11%

Flange 7%

Pipe & Fittings Nonmetallic 4%

Elbow 3%

Valve: Check 3%

Valve: Choke 3%

SPOOL 3%

SR 1,210 MM

Office Supplies

Air Conditioning

Industrial Services

Gen Sup & Bldg. Mat.

Computers

Static

Safety & Security Equip

Rotating

Environmental

E&I

Chemicals

Piping Sys.

Drilling

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Saudi Aramco: PublicNote: Sample of historical spend: Average of 6 years

1-2 Local Manufacturer Historical Spend –Chemicals

Lost Circulation

9%

Mud Products 46%

Alkalinity Control

2% Catalyst7%

Cement & Additives

16%

Corrosion Inhibitors 1%

Fluid Loss Control

20%

SR 827 MM

Office Supplies

Air Conditioning

Industrial Services

Gen Sup & Bldg. Mat.

Computers

Static

Safety & Security Equip

Rotating

Environmental

E&I

Chemicals

Piping Sys.

Drilling

Page 16: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

SR 362 MM

Office Supplies

Air Conditioning

Industrial Services

Gen Sup & Bldg. Mat.

Computers

Static

Safety & Security Equip

Rotating

Environmental

E&I

Chemicals

Piping Sys.

Drilling

Note: Sample of historical spend: Average of 6 years

1-2 Local Manufacturer Historical Spend –Electrical & Instrumentation Equipment

Solar Power Supply

20%

Cable Submarine

22%

Cable: Instrumentation

12%

Cable Bus 4%

Custody Sys.10%Generator: Diesel

7%

Motor3%

Transformer 2%

Wellhead ESD5%Transmitter

5%

Page 17: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Material spend with 3+ Local Manufacturers

Global Historical Spend Distribution

Mat. Spend with

OOK MFR Only

29%

Mat. Spend with

IK MFR Only

2%

Mat. Spend with

1-2 IK MFR

23%

Mat. Spend With

3+ IK MFR (OOK

spend)

32%

Mat. Spend With

3+ IK MFR (IK

spend)

14%

Note: Sample of historical spend: Average of 6 years

For further development:

Materials with 3+ IK MFRs but

limited in capacity and capability

Page 18: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Immediate Opportunities

IK Participation Limitations

How to Win Business

Saudi Aramco 10-Year Demand Forecast

Agenda

1

2

3

4

Page 19: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Material Limitations Definition

Limitations are specific restrictions that limits

the level of approval for a supplier against a

certain material.

The limitations are decided based upon the final

result of the technical evaluation of each facility.

Limitations could be on many aspects:

o Metallurgy

o Model type

o Size

o Thickness

o Engineering

Page 20: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Rotating Equipment

Manufacturer Name10 Years Forecast:

SR 8 B Initiative Lead:Local Business Development

Current Situation Future Situation (2021) Enablers

9COMs with limitations:-60000XXXXX: RE-ENGINEERED PUMP IMPELLER AND CASING:Approved for casing parts from bronze, grey cast iron, ductile cast iron, and stainless steel only.-600000XXXX: PUMP ; SUBMERSIBLE/31-SAMSS-10/ABOVE 75 KW, Not approved for fire water service pumps.

1. Different types of metallurgy: Low alloy steel, carbon steel, duplex stainless steel.2. Different applications.3. Spare parts manufacturing.

1. ES to work with supplier in developing capabilities to add 9COMs.2. Supplier must be willing to expand skillset, add 9COMs and ensure quality standards.3. Form a cooperative team between Saudi Aramco and the supplier to move forward.

Manufacturer Team Aramco Team Manufacturer Notes

Unit Representative Unit RepresentativeDiscussion points and suggestions

Rotating Equipment

Common Limitations

• Design capability

• Full machining capability

• Range of sizes

• Packaging

• Metallurgy

• Only assembly

• Lack of spare parts

manufacturing

• Limited applications

Sample Workbook

Page 21: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Static Equipment

Static Equipment

Common Limitations

• Thermal design

• Mechanical design

• Assembly & Welding

• Wall thickness

• Engineering design

• Fabrication only

• Size

• Metallurgy

• Pressure ratings

Manufacturer Name10 Years Forecast:

SR 87 B Initiative Lead:Local Business Development

Current Situation Future Situation (2021) Enablers

600000XXXX: TANK; SHOP FABRICATED.1) Only carbon steel2) Diameter up to 10 feet.3) Excluding dome roofs.4) Excluding external and internal floating roofs.600000XXXX: VESSEL; PRES.; MAX. WALL THK OF 19 MM. Tangent-to-Tangent length of pressure vessels is limited to 6 m maximum.

1. Different types of metallurgy.2. Flexible and dome roofs3. Various sizes and pressure

1. ES to work with supplier in developing capabilities to add 9COMs.2. Supplier must be willing to expand skillset, add 9COMs and ensure quality standards.3. Form a cooperative team between Saudi Aramco and the supplier to move forward.

Manufacturer Team Aramco Team Manufactrurer Notes

Unit Representative Unit RepresentativeDiscussion points and suggestions

Sample Workbook

Page 22: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Manufacturer Name10 Years Forecast:

SR 29 BInitiative

Lead:Local Business Development

Current Situation Future Situation (2021) Enablers

600000XXXX: TRANSMITTER; PRESSURE:limited to manufacture up to 4000 psi.600000XXXX: CONTROL VALVE FOR SEVERE SERVICE:limited to manufacture up to 24".600000XXXX: VALVE; GLOBE; CONTROL; INCLUDING ACTUATOR1. Only allowed to manufacture control valves up to Class 600# in accordance with ASME B16.342. Not allowed to supply control valves in fire-hazardous zone services as defined in SAES-B-XXXXor specified as "fire-safe".

1. Different types of metallurgy.2. Different sizes3. Different pressure rating4. Spare parts

1. ES to work with supplier in developing capabilities to add 9COMs.2. Supplier must be willing to expand skillset, add 9COMs and ensure quality standards.3. Form a cooperative team between Saudi Aramco and the supplier to move forward.

Manufacturer Team Aramco Team Manufactrurer Notes

Unit Representative Unit RepresentativeDiscussion points and suggestions

Electrical & Instrumentation Equipment

Electrical &

Instrumentation

Common Limitations

• Size

• Design

• Type

• Pressure rating

• Assembly only

• Specific model

• Power limitations

• Spare parts

Sample Workbook

Page 23: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Pipe & Pipe Fittings Equipment

Manufacturer Name10 Years Forecast:

SR 73 BInitiative

Lead:Local Business Development

Current Situation Future Situation (2021) Enablers

600000XXXX: ELBOW; PIPE; BW; CS; 02-SAMSS-005:Size: 1" to 12", Thickness: For 10" and below, maximum is Sch-XS, with the following exception: 4": up Sch-120 (11.13mm) & 6": up to 12.7 mm, For 12", maximum is sch-80. Radius: long radius only. Material: low alloy steel only

600000XXXX: PIPE; STEEL API 5L; SAW STRAIGHT; SOUR:16 inch to 62 inch OD size and maximum of 1 inch wall thickness.

1. Different types of metallurgy.2. Cladding3. Different sizes4. Coating

1. ES to work with supplier in developing capabilities to add 9COMs.2. Supplier must be willing to expand skillset, add 9COMs and ensure quality standards.3. Form a cooperative team between Saudi Aramco and the supplier to move forward.

Manufacturer Team Aramco Team Manufactrurer Notes

Unit Representative Unit RepresentativeDiscussion points and suggestions

Pipe & Fittings

Common Limitations

• Length

• Diameter size

• Wall thickness

• Metallurgy

• Welding types

• Welding material

• Coating

Sample Workbook

Page 24: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Immediate Opportunities

IK Participation Limitations

How to Win Business

Saudi Aramco 10-Year Demand Forecast

Agenda

1

2

3

4

Page 25: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Doing Business with Suppliers

iktva is imperative for doing business with Saudi Aramco

Competitive Cost

Quality

Schedule

Environment

Safety

Page 26: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

We Recently Determined a Number of Reasons Why Several IK Bidders Lost Opportunities

Significant Pricing Difference with OOK MFRs

o Raw material

o Specialist Labor

o Order quantities were uneconomical

Tier 1 bidding practices

o Bid Invitation

o Bundling of orders

o Lack of Feedback

o No Price Negotiation

Key Findings

40% 38%36% 35% 34%

25% 24%

20%18%

14%

Average Price Difference 2016*

*Sample size 60 Tier-1 RFQs

Page 27: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Doing Business with Suppliers

iktva is imperative for doing business with Saudi Aramco

Competitive Cost

Quality

Schedule

Environment

Safety

Page 28: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Previous quality major issues discovered during manufacturing phases:

o Deviations from Technical Requirements and PO Requirements.

o Workmanship Issues.

o Design Deficiency and Integrity.

o Falsification of Records.

o Substandard Material Use.

o Improper Preservation.

Deviations from Technical Requirements.

Workmanship Issues

Design Deficiency and Integrity.

Falsification of Records.

Substandard Material Use

Improper Preservation

Quality Lessons Learned

Page 29: Capturing Opportunities & Winning Business with Saudi ... · PDF fileSaudi Aramco: Public Capturing Opportunities & Winning Business with Saudi Aramco and its Suppliers ©2017,

Saudi Aramco: Public

Quality - Deviations from Technical and PO Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records.

Substandard Material Use

Improper Preservation

CASE:Plate HIC (Hydrogen-Induced Cracking) not conductedon the thinnest plate when two thickness platesproduced from the same heat which is considered adeviation to Saudi Aramco technical requirements 01-SAMSS-016.

Deviations from Technical Requirements

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Saudi Aramco: Public

Quality - Workmanship issues

Deviations from Technical Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records.

Substandard Material Use

Improper Preservation

CASE:Manufacturer have shipped several valves with majorquality defects, such as cracks, pin holes and paintissues. All these defects can be easily discoveredthrough visual inspection conducted by qualifiedinspectors.

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Saudi Aramco: Public

Quality - Design Deficiency & Integrity

Deviations from Technical Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records.

Substandard Material Use

Improper Preservation

CASE:The vendor has supplied Saudi Aramco with 2" diameterstainless steel check valves that do not have enoughclearance between the back side of the flange and thehinged section of the valve's body. This will not allowthe installation/insertion of a standard nut of thecorresponding stud bolt.

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Saudi Aramco: Public

Quality - Falsification of Records

Deviations from Technical Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records

Substandard Material Use

CASE:The vendor has falsified the WPS/PQR (WeldingQualification Procedures) to grant Saudi Aramcoapproval without conducting actual tests.

Improper Preservation

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Saudi Aramco: Public

Quality - Substandard material use

Deviations from Technical Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records

Substandard Material Use

Improper Preservation

CASE:Several cases reported of utilization substandardmaterial that resulted in material failures and fractures.

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Saudi Aramco: Public

Quality - Improper Preservation

Deviations from Technical Requirements

Workmanship Issues

Design Deficiency and Integrity

Falsification of Records

Substandard Material Use

Improper Preservation

CASE:During receiving inspection, it was found that severalboiler parts were severally corroded as they wereshipped without compliance with preservationrequirements.

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Saudi Aramco: Public

How to Win Business with Saudi Aramco and it’s Tier 1 Suppliers Summary

o Start working on your IKTVA baseline and 5-year IKTVA action plan.

o Develop training for cost estimators and engineers on how to deliver globally competitive value.

o Remove/improve limitations on your currently approved materials.

o Consider new sourcing strategies ( buying consortium for key materials that can be bought in bulk).

o Minimize rework due to quality issues.

o Work on improving production scheduling.

o Safety Zero Tolerance Policy - violations will result in banning individuals/vehicles/delivery trucks from entering Saudi Aramco facilities.

o Adhere to the Saudi Aramco Code of Conduct.

IKTVA Program

o Saudi Aramco is committed to driving local industrial development with the IKTVA program

o Tier 1 companies have agreed to IKTVAtargets over the next 5 years that will drive their procurement favoring IK suppliers

Saudi Aramco

Tier 2 Tier 1

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Immediate Opportunities

IK Participation Limitations

How to Win Business

Saudi Aramco 10-Year Demand Forecast

Agenda

1

2

3

4

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Capital Program 10-Year Forecast

Disclaimer:

The next slides contain forward-looking statements regarding future events based on current expectations,estimates, forecasts, and projections. The data is subject to updating, revision, further verification andamendment without notice. No reliance may be placed for any purpose on the information or opinionscontained in this presentation or any other document or statement, or on the completeness, accuracy orfairness of such information or opinions therein. No representation or warranty, expressed or implied, ismade or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy orcompleteness or fairness of the information or opinions contained in this presentation, and no responsibilityor liability is accepted by any of them for such information or opinions or for any errors, omissions,misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referredto in this presentation.

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Capital Program 10-Year Forecast = SR140 Billion / Year

10-Year Capital Program Forecast

Unconventional Resources

8%

Other4%

Pipeline3%

Infrastructure7%

Process Facilities12%

Maintain Potential14%

Drilling 52%

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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Drilling Materials Spend Forecast 2017-2026

Trees 13,900 units

Hanger assemblies,33,000 units

Cement6.8 million tons

Mud Products (liquid)

636 million gallons

Casing heads 14,000 units

ICDS & ICD-screens

1.2 million units

Quantity Examples Percentage of Total Material Spend

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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Rigs Oper. and Well Services Forecast (2017 – 2026) Total = SR 439 B

Rig Drilling Ops Services = SR 197 B

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

112

81

61

5

31

Oil -Onshore

Gas -Onshore

Oil -Offshore

Gas -Offshore

UR

Directional Drilling

27%

Technical Services

22%Operations & Completion Services11%

Roads & Locations

5%

Logging9%

Monitoring & Testing

9%

Drilling Equipment Rental 9%

Casing / Tubing &

Handling, 4%

Cementing / Pumping

Services, 4%

Perforating

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SR4B

SR8B

SR37B

SR40B

SR61B

SR81B

SR94B

SR95B

SR151B

Renewables

Power

Oil Facilities

Pipeline

Other

Infrastructure

Refinery & Petrochem

Gas Facilities

Maintain Potential

Surface Facilities Forecast (2017 – 2026)

10-Year Capital Program Forecast Surface Facilities (SR~500 Billion)

Unconventional Resources

8%

Other4%

Pipeline3%

Infrastructure7%

Process Facilities12%

Maintain Potential14%

Drilling52%

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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Examples of Surface Facilities Materials Forecast (2017-2026)

Surface Facilities MaterialsSR196 Billion

Surface Facilities Construction Services

SR240 Billion

BOILER PLANT EQUIP - 160 UNITS

PUMPS CS - 3,500 UNITS

LOW VOLTAGE CABLING - 56,000 KM

STORAGE TANKS - 1,000 UNITS

AIR COOLERS - 500 UNITS

COMPRESSORS - 500 UNITS

STAINLESS STEEL PIPING (SS314/316) - 137,000…

PROCESS VESSELS SS - 620 UNITS

CONCRETE - 24 MILLION M3

STRUCTURAL STEEL - 650,000 TONS

CONTROL VALVES - 90,000 UNITS

FIELD INSTR, ANALYZERS, GAGES - 70,000 UNITS

CS FITTINGS & VALVES - 19 MILLION UNITS

SS FITTINGS & VALVES - 6 MILLION UNITS

HEAT EXCHANGERS - 3,500 UNITS

CARBON STEEL PIPING - 23 MILLION TONS

PROCESS VESSELS CS - 6,000 UNITS

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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BOILER PLANT EQUIP - 160 UNITS

PUMPS CS - 3,500 UNITS

LOW VOLTAGE CABLING - 56,000 KM

STORAGE TANKS - 1,000 UNITS

AIR COOLERS - 500 UNITS

COMPRESSORS - 500 UNITS

STAINLESS STEEL PIPING (SS314/316) - 137,000…

PROCESS VESSELS SS - 620 UNITS

CONCRETE - 24 MILLION M3

STRUCTURAL STEEL - 650,000 TONS

CONTROL VALVES - 90,000 UNITS

FIELD INSTR, ANALYZERS, GAGES - 70,000 UNITS

CS FITTINGS & VALVES - 19 MILLION UNITS

SS FITTINGS & VALVES - 6 MILLION UNITS

HEAT EXCHANGERS - 3,500 UNITS

CARBON STEEL PIPING - 23 MILLION TONS

PROCESS VESSELS CS - 6,000 UNITS

Examples of Surface Facilities Materials Forecast (2017-2026) - CS Fittings & Valves

Ball valves0.36 MM valves

2%

Check Valve0.17 MM valves, 1%

Gate Valves2.0 MM valves, 10%Pipe Fitting, CS, 16.6

MM fittings, 87%

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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Examples of Surface Facilities Materials Forecast (2017-2026) - Ball Valves

0

20,000

40,000

60,000

80,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Ball Valves – All Types

CS SS Non-Metallic

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2017201820192020202120222023202420252026

150 300 600 900 1500

0

10000

20000

30000

40000

50000

60000

70000

2017201820192020202120222023202420252026

<4" 4" - 24" > 24"

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

BOILER PLANT EQUIP - 160 UNITS

PUMPS CS - 3,500 UNITS

LOW VOLTAGE CABLING - 56,000 KM

STORAGE TANKS - 1,000 UNITS

AIR COOLERS - 500 UNITS

COMPRESSORS - 500 UNITS

STAINLESS STEEL PIPING (SS314/316) - 137,000…

PROCESS VESSELS SS - 620 UNITS

CONCRETE - 24 MILLION M3

STRUCTURAL STEEL - 650,000 TONS

CONTROL VALVES - 90,000 UNITS

FIELD INSTR, ANALYZERS, GAGES - 70,000 UNITS

CS FITTINGS & VALVES - 19 MILLION UNITS

SS FITTINGS & VALVES - 6 MILLION UNITS

HEAT EXCHANGERS - 3,500 UNITS

CARBON STEEL PIPING - 23 MILLION TONS

PROCESS VESSELS CS - 6,000 UNITS

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Examples Required Workforce Skills (2017-2026)

DRILLING AVERAGE MANPOWER/YEAR*

SKILL LEVEL EXAMPLES

632

992

1058

1080

1220

1231

1258

1328

1372

1751

2093

2169

2249

2508

2701

3133

3337

3784

4050

4066

4181

4632

8663

9203

SuperintendentOffshore Supply Vesseles Seamen

Derrick manMud logger

Mobilization/ demobilizationHeavy Equipment operators

Rig techniciansWelder

Geophysicist/GeologistLogging

ElectricianFracking / cement technician

DrillerCrane Operator

Project managementMechanicLogistics

Roustabout & FloormenTruck Driver

Operators (Wireline, Rig & Pump)Admin*

Construction crewRough necks / rig hand

Engineers**

Total MP

Peak =

69, 000

Direct jobs

** Inclusive of all disciplines

1,000

1,100

2,100

2,900

3,500

4,300

4,400

5,800

5,900

8,800

9,100

9,800

11,500

11,800

12,500

19,100

29,200

42,000

Insulator

Instrument Fitter /technician

Cement Finisher / Mason

Millwright

Iron Worker - Rebar

Painter

Carpenter

Rigger

Vehicle Driver (Light-Heavy)

Electrician (line, wiring, cable …

Craft Helper

Equipment Operator (Light-Heavy)

Professional

Foreman

QA/ QC

Welder

Laborer

Pipefitter

Total MP

Peak =

270,000

Direct Jobs

PROCESS FACILITIES AVERAGE MANPOWER/YEAR*

SKILL LEVEL EXAMPLES

* This demand is for industrial projects only. It does not include

Commercial, Residential, or Infrastructure Projects.

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on thecompleteness, accuracy or fairness of such information or opinions therein. No representation or warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for suchinformation or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

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Key Points

• Immediate opportunities for materials

• Materials with no or few local suppliers

• Increasing capability – removing limitations

• Collaboration - Saudi Aramco and its supply chain will drive new business

• Doing Business - be competitive

• Over SR 1 trillion in spend over the next 10 years = opportunity

iktva is imperative for doing business with

Saudi Aramco

Competitive Cost

Quality

Schedule

Environment

Safety

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Saudi Aramco Contact details

Limitations program, materials or capacity expansion for local facilities

Supplier Solution Center UnitOmar KatheerTel.: [email protected]

New local businesses, market information

Local Business Development Unit

Imran HaririTel.: [email protected]

General Inquiries Supplier Help DeskTel.: [email protected]

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Thank you